Two years after its September 2024 launch, former European Central Bank President Mario Draghi’s economic blueprint faces a severe implementation deficit. According to data released by the Banco de España, drawing on analyses from the Real Instituto Elcano and the think tank EPIC, the European Union has fully enacted a mere 16% of the report’s competitiveness recommendations, highlighting deep systemic gridlock across Brussels.
The Bottom Line
- Slow Execution: Only 16% of the 176 strategic proposals outlined in the Draghi report are fully implemented as of July 2026, up 5 percentage points from levels reached in September of the previous year.
- Misaligned Priorities: The slowest regulatory progress occurs in high-impact sectors like energy and digital innovation, while areas like defense see faster traction.
- Private Intervention: In response to institutional inertia, Mario Draghi, Luis Garicano, and Stripe CEO Patrick Collison confirmed in late August the creation of the “Rhine Group” to find ideas to improve European regulation.
The Anatomy of EU Bureaucratic Gridlock
When Mario Draghi presented his competitiveness strategy to avert economic decline, policymakers across the continent praised its diagnostic depth. Yet, as of July 2026, the translation of political ambition into binding legislation remains severely bottlenecked. As Luis Díez Catalán, an economist at the Banco de España, noted in the central bank’s latest institutional blog, the friction lies squarely in the legislative machinery.
The numbers illustrate a stagnant regulatory landscape. Out of the total measures evaluated across six core categories—energy, raw materials, digitalization and innovation, clean industrial policy, defense and space, and the single sector market—only 16% are fully enacted. A further 26% sit in partial implementation, while 42% remain in process without an operational instrument in vigor. Crucially, 17% of surveyed proposals show zero progress.
Here is the math: reforms are stalling precisely where they are needed most. According to data from EPIC and the Banco de España, clean industrial policy and defense have reached 53% and 54% implementation respectively, though they are among the categories with a more neutral transformative impact. Conversely, energy policy—the category with the most transformative impact—sees a complete implementation rate of barely 1%.
| Strategic Axis | Transformation Impact | Implementation Rate (Fully / Partially) |
|---|---|---|
| Clean Industrial Policy | Neutral | 53% (Full) |
| Defense and Space | Neutral | 54% (Full) |
| Critical Raw Materials | High | ~40% (Implemented) |
| Digitalization and Innovation | High | (6% Full, 23% Partial) |
| Energy Policy | Highest | (1% Full, 20% Partial) |
Bridging the Gap: The Rise of the Rhine Group
Frustrated by legislative dilution, architects of the original strategy are bypassing traditional Brussels committees. In late August, Mario Draghi teamed up with economist Luis Garicano and Stripe CEO Patrick Collison to establish the “Rhine Group.” This coalition brings together 65 prominent business leaders, academics, and policymakers—including BBVA president Carlos Torres and Cotec Foundation president Cristina Garmendia—to find ideas to improve regulatory reform.
The stakes extend far beyond corporate profit margins. The Rhine Group’s manifesto points out a stark structural disadvantage: of the world’s largest technology firms, only 4 are European. Without immediate intervention to close the innovation gap and lower structural energy costs, the continent risks losing its ability to fulfill the obligations of a modern state, including public pensions, healthcare, and national defense.
“The problem is not a lack of ambition among leaders. It is what happens after, when that ambition enters the machinery. The agreements are processed in committees that dilute and delay them until the result barely resembles the original intentions,” Mario Draghi stated during his address at the Charlemagne Prize ceremony in May 2026, as cited by the Banco de España.
But the balance sheet tells a different story. While corporate executives and central bankers sound the alarm, international competitors continue to pull ahead in competitiveness. Until the European Council streamlines its decision-making framework and commits to the estimated 5% annual GDP investment required, the continent faces an existential threat to its existence as a non-failed state.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
